Question

The PBSA outlines certain criteria that must be met within pension plans; the areas that primarily impact payroll are:

a) Investment strategies
b) Marketing initiatives
c) Contribution limits and vesting
d) Employee training programs

Answer 1

The Pension Benefit Standards Act mainly affects payroll through contribution limits and vesting in pension plans. Meanwhile, traditional pensions are increasingly replaced by defined contribution plans like 401(k)s, which are portable and offer potential for real rates of return, safeguarding against inflation for retirees.

Step-by-step explanation:

The Pension Benefit Guaranty Corporation (PBGC) has a role in ensuring that pensions are secure even if a company faces bankruptcy. However, traditional pensions are becoming less common, overtaken by defined contribution plans like 401(k)s and 403(b)s. These plans involve an employer making regular contributions to an employee's retirement account, which the employee can also contribute to, and these funds can be invested in various ways. Such plans are tax-deferred and can be transferred if an employee changes employers, which can lead to real rates of return that protect retirees from inflation.

The Pension Benefit Standards Act (PBSA) primarily impacts payroll through contribution limits and vesting requirements for pension plans. Investment strategies, marketing initiatives, and employee training programs are not the main areas impacted by PBSA in the context of payroll.